Karl Koehler, chief executive of Tata Steel’s European operations, said: “I know this news will be unsettling for all those affected, but these tough actions are critical in the face of extremely difficult market conditions which are expected to continue for the foreseeable future.

“We need the European Commission to accelerate its response to unfairly traded imports and increase the robustness of its actions.

“Not doing so threatens the future of the entire European steel industry.

“And while we welcome progress on UK energy costs, the Government must take urgent action to increase the competitiveness of the UK for its vital steel sector.

“This includes lowering business rates and supporting energy efficiency and anti-dumping cases so we can compete fairly.

“Tata Steel has been a hugely supportive investor, and has invested £1.5 billion in its UK operations.

“We now need all stakeholders to do their utmost to meet the unprecedented challenges the steel sector is facing.”

Community, the steelworkers’ union, says it will be doing ‘all it can’ to help workers over the coming weeks.

General secretary Roy Rickhauss said: “Our immediate thoughts are with all the steelworkers and their families who may be affected by today’s announcement.

“We will be doing all we can in the coming weeks to support our members at this difficult time.

“We will be vigorously challenging the company’s proposals to ensure they do not further weaken the integrity or capacity of our steel plants.

“Today’s announcement is no reflection of the skills and commitment of the Tata Steel workforce, which has been breaking production records over the past year.

“Rather, it is yet another chapter of the UK’s ongoing steel crisis and the lack of a proper Government response.

“This industry needs meaningful action from the UK Government which up to now has been characterised by fast talking but slow delivery, despite persistent warnings from Community that delays in implementing support for steel would have an impact on jobs.

“Even now, promised compensation for energy-intensive industries is yet to be received.

“The UK Government must step up and work with trade unions and businesses to ensure this industry exists for generations to come.

“The dumping of cheap Chinese steel is one of the biggest causes of this crisis, yet the UK Government remains a cheerleader for China and their bid for ‘market economy status’, which would decimate what’s left of our steel industry. “This cannot be allowed to happen.

“As well as Government support, it is absolutely vital that Tata Steel makes clear its long-term commitment to steelmaking in the UK.

“The workforce has made significant sacrifices in recent years, on the assurance that jobs would be protected.

“However, rather than delivering on this promise, Tata has simply continued to slash jobs.

“Tata Steel must now come clean about its long-term commitment to the UK.

“Community, as the steelworkers’ union, stands ready to play our part in securing a future for the industry.”

East Midlands UKIP MEP and the party’s small business spokesman Margot Parker said: “This is awful news for the industry and for those workers up and down the country who now face redundancy and an uncertain future.

“The Government needs to step in and take action on the flood of imported steel into this country.

“This is just another step on the path of de-industrialisation in the UK due to uncompetitive energy prices driven by draconian EU environmental controls.

“This has a knock-on effect on businesses of all sizes as many of them are in the supply chain and are hit hard by these job losses.”

Fellow UKIP MEP for the East Midlands Roger Helmer, who is the party’s energy spokesman, said: “Energy costs are a major factor in driving the closure of heavy industry in the UK and these are as a direct result of EU and UK policies.

“Ministers have said they have done all they can to help the steel industry - this is simply not true as the carbon floor price policies are an extra burden imposed by our own Government.

“The Government has been unable to take measures against China dumping cheap steel on the global market because it is constrained by the terms of our EU membership.”

Angela Eagle MP, Labour’s shadow first secretary of state and shadow secretary of state for business, innovation and skills, said: “This is devastating news for all of the workers, their families and the close-knit communities affected.

“Local Members of Parliament, trade unions and others are doing all they can to assist those impacted by today’s announcement and working to put the steel industry on a sustainable footing for the future.

“Labour has long called for David Cameron’s government to take immediate action to help the steel industry, but they’ve sat on their hands while the industry has descended further into crisis.

“Vital reform of EU trade defence instruments for example has been blocked by number of countries, principally led by this Tory government.

“At a high-level meeting with senior representatives of the European Commission in Brussels last week, I made my frustration at the lack of action - specifically with regard to the surge of imports of steel rebar from China - absolutely clear.

“Only by taking immediate and decisive action, not least by fully engaging at an EU level, can the government make sure our steel industry survives so that it can benefit from planned infrastructure spending.

“If this doesn’t happen urgently, the Tories’ laissez-faire attitude to our steel industry could lead the downturn into a death spiral.”